Cutting Federal Workforce Costs Money?

John Gravois writing in the Washington Monthly makes the case that reducing the federal workforce may actually cost more money than it saves:

The problem is that, as employers go, the federal government is in fact pretty exceptional. A corporation can shed workers and then revise its overall business strategy accordingly. A strapped city government can lay off a few street sweepers and then elect to sweep the streets less often. But federal agencies are governed by statutory requirements. Unless Congress changes those statutes, federal agencies’ mandates—their work assignments—stay the same, regardless of how many people are on hand to carry them out. ... “It raises the hairs on my neck when I hear people say we’ve got to do more with less,” says John Palguta, a vice president for policy at the Partnership for Public Service, a nonprofit focused on the government workforce. “The logical conclusion is we’re going to do more with nothing.” ...

[I]f Congress and the White House agree to substantial cuts in the federal workforce but don’t also agree to eliminate programs and reduce services, the end result could be more spending and deficits, not less. Strange as it may sound, to get a grip on costs, we should in many cases be hiring many more bureaucrats—and paying more to get better ones—not cutting their numbers and freezing their pay. Because in many parts of government, the bureaucracy has already crossed that dangerous threshold beyond which further cuts can only mean greater risk of a breakdown. Indeed, much of the runaway spending we’ve seen over the past decade is the result of our having crossed that line years ago—the last time there was a Democrat in the White House, a divided government, and calls for slashing the federal workforce in the air. ...

The average voter may imagine federal bureaucracies as overstaffed, full of people leaning on their rakes and sharpening their pencils. But the truth is, most agencies are, if anything, understaffed. The government has grown tremendously in its spending and scope since the 1960s, and the population of the nation has grown by a margin of 100 million people, but the size of the federal workforce has remained remarkably static at about 2 million. Since coming into office two years ago, the Obama administration has bumped up staff levels by about 100,000, in part through “in-sourcing”—bringing back into the civil service inherently governmental work that had been farmed out to contractors. If this leads to better management, it could well mean a stanching of some of the cost overruns and regulatory failures that have been causing the government to bleed red ink. Today’s mindless demands for austerity, however, could reverse this trend.

The State Of The Negotiations

From Federal News Radio:

... SSA [Social Security Administration] and the union finished a second week of negotiating last Friday [February 25] for a new contract. SSA workers have been working under the old contract, even though it expired more than a year ago.

SSA and AFGE completed their first round of negotiations in January and agreed to 12 of the most straightforward issues in the new contract, said Witold Skwierczynski, AFGE's chief negotiator.

"The entire contract has about 50 issues so the easiest 12 are agreed upon," Skwierczynski said. "We now are embarked on the toughies. Things like appraisals, performance awards, some union institutional stuff like office space, the use of their e-mail and some travel and training issues."

Last week, SSA and AFGE were supposed to meet with federal mediation experts to help push the process along.

"They haven't decided anything despite the fact a furlough is potentially imminent," he said. "We were to negotiate scenarios about what may happen, and how agency will implement furloughs. But since they were unable to tell us anything today about what they are planning, we are discussing proposals we will put on the table on any particular scenario."

He said SSA management wouldn't tell the union who is essential or what jobs are exempt. Skwierczynski said SSA management also didn't want to discuss if there was a funding shortfall, if they planned to keep a short staff or just close offices altogether to make up for the lack of funding.

He added that AFGE and SSA are deferring current contract negotiations to March 22.

"We are up against difficult negotiating team on management side who is reluctant to compromise in many areas," he said. "We are hopeful with the Federal Mediation and Conciliation Service involved we can whittle down the differences, and then go to federal services impasse panel if we need to."

Skwierczynski said among the top issues employees want AFGE's help with is around workplace stress, specifically around having a more flexible working environment.

He said health and safety issues around indoor temperature and air quality were among the other top issues as were alternative work schedules for field employees, including flex time, telework and credit hours.

"I've done a lot of contracts and there is an evolution involved and we are cognizant that we have to get to it," Skwierczynski said. "The agency's strategy is to keep the current contract in place so they are stretching the process out. We need to try to start getting to our final positions and get to the bottom line."

Senate Appropriations Proposal

From a press release issued by the Senate Appropriations Committee, concerning the Committee's bill to keep the government operating through the end of the fiscal year (FY):

The House Republican CR [Continuing Resolution] cuts funding for the Social Security Administration’s administrative expenses by $125 million below the FY 2010 enacted level. This would force the SSA to freeze hiring across the agency and possibly furlough employees, at a time when the number of Americans filing for disability and retirement benefits is at record levels. As a result, every American filing benefits this year would wait longer for the benefits they’ve earned, backlogs of those with pending disability claims and hearings would increase significantly, and waiting times at field offices and SSA’s 1-800 number would jump dramatically. The Senate bill, by contrast, provides $600 million more than the House Republican proposal (including rescissions). Compared to the House CR, it will allow SSA to process about 300,000 more initial disability claims and 150,000 more disability hearings, and prevent delays in beneficiaries receiving their retirement benefits.

Despite this, the Senate Appropriations proposal would give Social Security $557 million less than the President's proposal for this FY. At least it would still be $372 million more than the FY 2010 level if my math is correct.

The Associated Press is already saying that this proposal cannot pass the Senate much less gain acceptance by the House of Representatives. We may be lucky to keep Social Security's funding at the FY 2010 level for the rest of the fiscal year.

Below is a countdown clock to a possible government shutdown.

Contradictory Poll Findings

From the Wall Street Journal:

Less than a quarter of Americans support making significant cuts to Social Security or Medicare to tackle the country's mounting deficit, according to a new Wall Street Journal/NBC News poll, illustrating the challenge facing lawmakers who want voter buy-in to alter entitlement programs. ...

More than 60% of poll respondents supported reducing Social Security and Medicare payments to wealthier Americans. And more than half favored bumping the retirement age to 69 by 2075.

This is despite the fact that about half of those eligible already retire at age 62. A lot of younger people badly underestimate the effects of the aging process.

Senate Appropriations Hearing Set For March 9

The Senate Appropriations Committee has scheduled a hearing for March 9 at 9:30 a.m. on funding for the Social Security Administration for this fiscal year and the next. The following witnesses are scheduled to testify:

• Michael J. Astrue, Commissioner of Social Security
• W. Lee Hammond, President, American Association of Retired Persons (AARP)
• Marty Ford, Co-Chair, Consortium for Citizens with Disabilities Task Force on Social Security Acting Director, The Arc (formerly called the Association for Retarded Citizens) and United Cerebral Palsy (UCP) Disability Policy Collaboration
• Joe Dirago, President, National Council of Social Security Management Associations, Newburgh, New York

Will the House Appropriations Committee hold a hearing on Social Security appropriations for this year or the next? That would give a Republican Commissioner of Social Security the opportunity to tell House Republicans that the budgets they are proposing would wreak havoc at Social Security. That would be interesting.

Can't Wait

The Wall Street Journal is quoting Republican House Speaker John Boehner as saying that he is determined to offer a budget this Spring that will cut Social Security benefits.

Headquarters Building Evacuated

WBAL in Baltimore reports that one of Social Security's buildings at its headquarters in Woodlawn, Maryland was evacuated today for almost two hours because of a suspicious package.

Budget News

The Associated Press is saying that the White House is willing to agree to more than $6 billion in additional spending cuts over the rest of the fiscal year. The question is whether this would be a prelude to a settlement with House Republicans or whether this would only end up buying a little more time. At some point, the White House has to say it will no longer carve slices off the salami, that there must be a deal to keep the government open for the rest of the fiscal year.

The White House is not saying where this $6 billion might come from but I would be quite surprised if any of it comes from the Social Security Administration's budget. There is every sign that this White House understands the need for additional funding for Social Security.